Localspeak

It's The Customers, Stupid

5 October 2011

With Netflix more vulnerable than ever—its stock at a 52-week low—such streaming/Video on Demand ( VOD ) players as Apple, Amazon, Blockbuster, Hulu Plus and Vudu are angling for a bigger slice of the market pie.

And so, while Netflix loyalists continue to jump ship, Localspeak took a look at the Q3 social research picture to discern the nascent trends in consumer behavior, emotion and perception toward the brand category.

In addition to the Netflix social media analytics research we began in June utilizing NetBase Scorecard and Workbench tools, we’ll now be tracking brand equity and consumer insights in Q4 for several category players—Amazon Instant Video, Blockbuster, iTunes and Vudu.

In the charts below, you’ll note the contrasting shift in social conversation drivers and consumer attitudes toward five brands in the streaming brand landscape. The first chart analyzes brand attributes for the past 12 months; the second only for Q3.

Streaming/VOD Brand Conversation Drivers – Positive vs. Negative – Q3

As compared to the overall 12-month period, notable consumer sentiment shifts in Q3 include:

• iTunes has replaced Netflix in the “easiest way to add” category
• “Streaming” conversation has reversed from iTunes to Netflix, with nearly half as many satisfied Netflix customers now saying they are dissatisfied
• “Movie” selection sentiment has shifted from iTunes to Netflix, with negative sentiment quickly gaining
• Apps for both iTunes and Netflix have became part of the Q3 discussion
• The rise of Netflix’ subs outcry over price hike and cancelled subscriptions replacing negative “speed” sentiment in Q3
• iTunes “synching” complaints diminished in Q3, replaced by a lower volume of general iTunes grievances

As streaming/VOD brands continue to bolster their catalogs with licensing deals and competition for brand equity heats up, utilizing the Netbase Scorecard and Workbench social media and analytics tools enable us to provide brand equity benchmarks within a fluid and quickly shifting industry. In monitoring brand benchmarks, we can deliver a highly accurate, no hassle, and cost-effective brand equity insurance plan—even preventive “forensics” to help avert a painful, albeit classic fall from grace as Netflix.

To wit, Netflix could have utilized the early discovery system inherent in a basic social media-monitoring Scorecard. Doing so would have detected, perhaps reversed brand dissonance. Quick thinking might have diverted massive defection by offering unique pricing plans to, say, its initial million subscribers. For example, Netflix might have offered unique tiered pricing plans for subscribers based on term of subscription. Further, even as Reed Hastings posts his “apologies,” if sensitively measured against the prevailing social climate, they might have been perceived as authentic not arrogant. Hastings and team also would have detected early warning signs of brand encroachment by competitors.

Blinded by ambitious global expansion, Netflix chose to ignore the rage of its highly engaged and vocal customers at home, losing total sight of its most valuable asset—brand loyalty.